Collateral does not reduce the risk of a loan per se, because A. it is not part of the loan agreement B. the risk of a loan is determined by the borrower’s willingness and ability to repay the loan C. it may be worth less than the bank thinks D. the bank may not have title to the collateral
Collateral does not reduce the risk of a loan per se, because A. it is not part of the loan agreement B. the risk of a loan is determined by the borrower’s willingness and ability to repay the loan C. it may be worth less than the bank thinks D. the bank may not have title to the collateral
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Collateral does not reduce the risk of a loan per se, because
A. it is not part of the loan agreement
B. the risk of a loan is determined by the borrower’s willingness and ability to repay the loan
C. it may be worth less than the bank thinks
D. the bank may not have title to the collateral
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